Shares of HDFC Bank surged to a record high of Rs 1,885 in intra-day trade on the BSE on Wednesday, marking a 1 per cent gain in an otherwise subdued market. The stock has rallied 7 per cent over the past three trading sessions as investor sentiment strengthens ahead of the bank’s Q4FY25 results, which are scheduled for release on Saturday, April 19.
The latest rally has pushed the bank's stock price past its previous all-time high of Rs 1,880, achieved on December 19, 2024.
A key player in India’s banking sector, HDFC Bank is among the top three in auto and personal loans, commercial vehicle financing, cash management, and supply chain finance. Its market dominance is underpinned by robust brand equity, professional management, extensive distribution network, strong CASA base, and a clean loan book with a firm focus on profitability.
According to the bank’s pre-earnings update for the March quarter, deposits grew 14.1 per cent year-on-year (Y-o-Y) to Rs 27.14 trillion, with sequential growth of around 6 per cent. HDFC Bank added ₹1.5 trillion in deposits during Q4 — its highest quarterly gain in FY25 — compared to Rs 63,500 crore in Q3 and Rs 1.2 trillion in Q2. Average deposits rose by 16 per cent Y-o-Y to Rs 25.28 trillion. CASA deposits also saw a rise of 5.7 per cent Y-o-Y to Rs 8.29 trillion.
BNP Paribas, in a recent update on the financial sector, identified HDFC Bank as a potential outperformer this earnings season, citing a favourable loan mix, easing certificate of deposit (CD) rates, and the retrial of high-cost liabilities. The brokerage anticipates a stable or slightly improved net interest margin (NIM) for the bank, in contrast to marginal declines projected for its peers.
Analysts at Emkay Global Financial Services cautioned that subdued credit growth may limit earnings growth, although a decline in quarter-on-quarter slippages—particularly in the Kisan Credit Card (KCC) segment—could offer support. They also highlighted that the recent reduction in risk weights for NBFC and MFI loans, effective from April 1, could boost Tier-I capital ratios by 8-90 basis points for several banks, including HDFC Bank, which may drive credit growth from Q1FY26.
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On the structural front, HDFC Bank’s continued efforts to improve its loan-to-deposit ratio (LDR) appear to be bearing fruit. Axis Securities expects the LDR to improve to approximately 87 per cent by FY27. While CASA growth remains a challenge, the bank’s push for time deposit (TD) growth is helping it build a more stable customer base.
Despite industry concerns about rising stress in the unsecured lending segment, HDFC Bank has maintained strong asset quality. Analysts believe the bank is well-positioned for sustained performance, backed by potential NIM improvement, controlled operating expenses, and minimal credit costs. Return ratios—RoA and RoE—are projected to remain strong at 1.8-1.9 per cent and 14-15 per cent, respectively, over FY25-27.
As investors await the upcoming quarterly results, HDFC Bank continues to stand out in the banking space for its solid fundamentals and resilient performance.
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